The Problem of in-App Purchases

With the soaring popularity of the videogame Fortnite among children, swathes of parents have been left alarmed by the potential of in-game purchases to drain their wallets. This is certainly not a new issue, but with games like this blossoming throughout the digital world, it is time to seriously address the problems these apparently small transactions can cause, and what parents can do to keep their children, not to mention their bank balances, safe.

A new Business Model

Before the internet became widespread, purchasing a videogame was a fairly straightforward procedure: buy a physical copy of the game, and enjoy limitless play. With the dawn of portable, multifunctional devices such as smartphones, though, the phenomenon of casual gaming emerged. Since so many casual games – from Candy Crush to Angry Birds – can be downloaded for free, the developers must find alternative ways to turn a profit. Much of the time, this is by displaying in-game advertisements, but most new games also profit through small purchases (often called micro-transactions) which can be made inside the game. These purchases could be additional in-game currency, various power-ups, new characters, or cosmetic upgrades such as extra costumes. Although individual purchases are usually very cheap, they can quickly pile up.

In 2017, in-app purchases accounted for around $30 billion worldwide. Unfortunately, they can lead less savvy players to spend significant amounts of real-world money on virtual merchandise. Many of these games are targeted at children, who are generally more vulnerable to advertisements, and more likely to be drawn in by promises of a doing better in the game. This can pose issues for parents and children alike.

Alarming Costs

Not only are many games targeted at children full of opportunities for in-app purchases, but these purchases can be incredibly easy to make. Major platforms for smart-phone gaming – from Apple’s App Store to Android’s Google Play Store – are connected to the account holder’s bank account for ease of use, and this ease extends to within games themselves. In some cases, a player would not even need to enter a password to approve in-app purchases; clearly, it can be far too easy for children to rack up huge bills without their parent’s consent, by accident or otherwise.

One mum, Julie, told Money Saving Expert that her son had managed to spend £150 on in-app purchases over the course of only four days – and she is not alone. Another parent, David, revealed to the site that his seven-year-old son had racked up £80 through making in-game purchases on his Xbox One. Neither parent realised that their payment details would be accessible within the game itself. Some commentators warn that the extreme ease of in-app purchases is by design, counting on players and parents alike being caught unawares. In 2016, Amazon was forced to refund US parents whose children had made in-app purchases on their platform, at the behest of the Federal Trade Commission. Like other platforms, a not even a password was required for these purchases to be made. The examples above prove that in-game purchases can quickly carve a real hole in the family budget, but luckily there is plenty you can do to keep your money safe from this insidious money-making strategy.

Teaching Children to be Ad-Savvy

Not only can in-game purchases make for shockingly high bills, they can also impart surprisingly damaging financial messages to the children who encounter them every day. If success in the game can be bought as well as worked towards, the drive for a strong work ethic could potentially be undermined. As well as this, scoring systems on casual games can be obscure, troubling the link between input and result. Finally, some have suggested that purchasing random digital items is tantamount to gambling.

One solution could be to simply ban children from playing these kind of games, but this allowing them to lose out on both fun and mental stimulation. Additionally, insulating children from these kind of marketing strategies could be more harmful in the long-run, as it removes the opportunity for them to develop a healthy cynicism towards the advertising messages which will probably bombard them for most of their lives. In fact, child-focussed marketing is nothing new – McDonald’s have been using their Happy Meals toys to pull in children for decades.

Instead of totally banning such games, one practical alternative is to talk to your child about them. This could even lead to a wider project of fostering an awareness in your child of what marketing is, and what companies want. You can help your child to become savvy to advertisements with the following tips:

With very young children, it can be helpful to simply point out the difference between adverts and actual programmes when watching television, helping them to cement the distinction from an early age.

Pointing out adverts online can also help children develop their awareness.

When children are a little older, you could discuss the purpose of advertisements, and why they might want to present their goods or services in a certain light. This will help children to not take what adverts tell them at face value.

Encourage your child to be careful with personal details. Many companies will offer freebies or discounts for email addresses and other such details. It is a good idea to implement a rule whereby your child is not allowed to give out any details without permission. This is especially vital online, where many competitions and online games require these details.

Setting Restrictions on your Devices

As more and more services move online, it is vital to have these conversations with your child, but there is also plenty you can do to protect your account from unauthorised in-app purchases.

Apple:

Open setting

Scroll to and select the tab marked ‘General’

From this list, select ‘Restrictions’

Select ‘Enable Restrictions’

Set a four digit passcode

Turn on the option for ‘In-App Purchases’

Android

Open Google Play Store

Navigate to ‘Settings’

Select ‘Require authentication for purchases’

Set either fingerprint recognition or your password

This will prevent anyone using your account to make any purchases without permission.